BUSINESS: The Ultimate Resource July 2006 Upgrade 46

MANAGEMENT GIANT
Lord Thomson of Fleet (Roy Thomson)

TIMELINE
1894 Born. 1904 Leaves school to work in coal yard. 1924 Motor parts business revenue reaches $700,000. 1931 Starts radio station CFCH. 1934 Buys first newspaper, the Daily Press. 1954 Moves to the United Kingdom. Buys the Scotsman. 1959 Buys Lord Kemsleys newspapers. 1964 Receives peeragebecomes Lord Thomson of Fleet. 1966 Starts Thomson Travel. 1976 Dies.

SUMMARY
Roy Thomson (18941976) grew up in Canada surrounded by poverty. As a small boy he was forced to work his way through school by doing odd jobs. He subsequently drifted from job to job until, discovering he had a talent for selling, he obtained a franchise to sell radios. But poor radio reception proved a major obstacle. Determined to improve his prospects, he started his own radio station in 1931. By 1934 the enterprising Thomson had accumulated several radio stations as well as his first newspaper. By 1953 he had built a considerable business empire, with 19 newspapers and a ragbag of other businesses including an ice cream cone factory. His success provoked disquiet among powerful figures in Canada. When rumors surfaced of possible investigations into an abuse of a dominant market position, he decided to leave.

A & C Black Publishers Ltd 2006

BUSINESS: The Ultimate Resource July 2006 Upgrade 46

Like Lord Beaverbrook before him, Thomson went to the United Kingdom, where he continued to prosper. A series of shrewd business deals left him the owner of a stable of newspapers that included The Sunday Times, the Scotsman, and a number of regional titles, as well as television interests. He was created Lord Thomson of Fleet in 1964. In the latter part of his life he founded Thomson Travel and was instrumental in developing the North Sea oilfields.

BACKGROUND AND RISE

Roy Herbert Thomson was born in Toronto, Canada, in 1894. His father was a barber not a very successful oneand the family was forced to take in lodgers to make ends meet. Thomson was a bookish boy, preferring the local library to the athletic field, and he was often to be found curled up on the sofa peering at his latest tome through the thick glasses he wore. He worked his way through school doing odd jobs, leaving his formal education at the age of 14 to work in a coal yard. Soon afterward he took up work selling rope with a youthful entrepreneur, the improbably named Ardagh Scythes. Thomson volunteered for World War I, but he was turned down for military service. After an unfortunate foray into farming in Saskatchewan, he returned to Toronto and entered into business selling car parts with his brother. By this time he was married to one of his mothers ex-lodgers, Edna Irvine. The car parts enterprise was a qualified success. Sales were good, reaching $700,000 by 1924. Unfortunately, however, the young Thomsons inexperience showed: they overextended the company and ran into financial difficulty. Roy Thomson moved on, this time to Ottawa, leaving his brother to salvage the business. In Ottawa Thomson obtained a franchise selling radios for De Forest Crosley Company in North Bay. It was hard work. Thomson tramped the streets on foot in the dead of winter in search of customers. When he discovered one of the main barriers to sales was the dismal radio reception in the area, he vowed to remedy the situation. In March 1931 Thomson started his own radio stationCFCH North Baywith a years rented license bought for $1 and a transmitter bought on credit. He had no experience in broadcasting.

DEFINING MOMENTS
It wasnt radio that made Thomsons fortune, it was newspapers. But it was radio that led Thomson to a career in newspapers. Following the success of CFCH, he opened two other radio stations north of North Bay: CKGB at Timmins in 1932 and CJKL at Kirkland Lake in 1933. In the building in which Thomson rented space for his radio station, his landlord, Jim Bartleman, had resurrected a weekly local newspaper and renamed it the Daily Press. In 1934, after a dispute over carrying advertising for a rival of the Daily Press, Thomson offered to buy the paper from Bartleman, acquiring it for $200 down and 28 similar monthly payments. By 1936 the paper was being published daily. After overcoming a setback in 1939 when the Daily Press building burned to the ground, Thomson extended his newspaper holdings, buying four newspapers in southwestern Ontario for $900,000.
A & C Black Publishers Ltd 2006

BUSINESS: The Ultimate Resource July 2006 Upgrade 46

Over the next few years Thomson continued to acquire newspapers, and he slowly became part of the Canadian establishment. He cleverly pinpointed family-run newspapers across the country as takeover targets. These were often inefficiently run, and when the proprietor died they faced crippling estate taxesat which point Thomson would step in with an offer. By 1953 he dominated the Canadian press. He was the owner of 19 publications and a disparate collection of other businesses, including hairdressing salons and an ice cream cone factory. Running out of newspapers to purchase, and surrounded by rumblings about his monopoly power, Thomsonlike media magnate Lord Beaverbrook before himturned his attention to the United Kingdom. Thomson headed for Great Britain in 1954. Once again he targeted a newspaperthe Scotsmanwhich at the death of the proprietor was likely to lead to heavy estate taxes. The paper was also losing money, another incentive to sell. The only sticking point was management resistance to selling to a non-U.K. resident. So in 1954, at the age of 59, Thomson relocated to Scotland. Hes flipped his lid, said his daughter Irma when she heard the news. It was a bold move. Unlike Lord Beaverbrook, who had left Canada for England, Thomson settled in Edinburgh and was not connected to the British political and social establishment. The deal that followed the acquisition of the Scotsman didnt endear him to the business establishment either. Borrowing money from the National Commercial Bank of Scotland, he paid 400,000 for the franchise of Scottish Television. Television was still a relatively new industry and critics dismissed the deal as senseless. Thomson disagreed: it was, he said, a license to print money. He was right. Thomson marched on, conquering all before him. In 1959 he bought out media baron Lord Kemsleys media interests. These included regional papers across the United Kingdom plus the jewel in the crown, The Sunday Times of London. More acquisitions followed, including The Times of London in 1966 and the publishing businesses Thomas Nelson and Michael Joseph. Thomson was knighted in 1964 and received a peerage, becoming Lord Thomson of Fleet, named after Fleet Street, the traditional home of British newspapers. Even then, after achieving one of the biggest ambitions of his life, Thomson didnt relax. He poured his immense energies into diversifying his interests. In 1966 he founded a travel business, Thomson Travel, and then, in what was to prove one of his most lucrative deals ever, he linked up with the oil tycoon J. Paul Getty to exploit the North Sea oilfields with Thomson North Sea. Along the way he sold the idea of the Yellow Pages to the U.K. Post Office. Thomson didnt live to see the full rewards that were to flow from the Piper and Claymore North Sea oilfields. He died of a stroke in 1976, aged 82.

A & C Black Publishers Ltd 2006

BUSINESS: The Ultimate Resource July 2006 Upgrade 46

CONTEXT AND CONCLUSIONS

Like all great entrepreneurs, Roy Thomson had the innate ability to spot a business opportunity. He appreciated the potential of radio when the industry was in its infancy and understood the power of newspapers. Using a clever strategy that traded on the tax systems imposition of estate taxes, he was able to acquire a substantial portfolio of media interests. And to prove it was no fluke he repeated his success on the other side of the Atlantic in the United Kingdom. By all accounts, unlike other media barons he was content to let his editors manage their own papers without significant interference. This hands-off approach set him apart in the media industry and left him free to concentrate on other enterprises such his travel company and his oil interests.

FOR MORE INFORMATION

Books: Braddon, Russell. Roy Thomson of Fleet Street. London: Collins, 1965.

A & C Black Publishers Ltd 2006